The Story of the American Merchant Marine

by John Randolph Spears

Then the effect of admiralty supervision upon the subsidized ships was an incubus upon progress. Naval men are usually conservative, and conservatism often means stupidity. Thus, after the British Dreadnought had demonstrated the efficiency of the turbine engine our American naval engineers provided one battleship with turbines and another of the same model with reciprocating engines in order to learn whether the turbine was worth installing in future ships! The Cunard ships were built of wood, long after iron was known to be a better material, because of naval stupidity. Worse yet, when the requirements of the merchant service became imperative the rules of the admiralty were evaded—ships were reported to be fit for war cruisers when in fact they were useful as transports only.

After the Civil War, Congress provided subsidies by which a line from New York to Rio Janeiro, another from San Francisco to China and Japan, and a third from San Francisco to Hawaii, were established. Under these contracts the policy did not have quite a fair trial. The beneficiaries by activity in politics created so much opposition that the subsidies were withdrawn before the effect was fully apparent.

By the Act of March 3, 1891, a subsidy was again provided under the thin disguise of paying for carrying the mail—a reprehensible plan, because if subsidies are justified, they ought to be paid openly. The fact is that the methods of indirection employed by the advocates of subsidy have done much to discredit their system. Under this act ships of 8000 tons and a speed of 20 knots receive $4 a mile "by the shortest practicable route for each outward voyage." Ships of 5000 tons and a speed of 16 knots receive $2 a mile. Ships of 2500 tons and a speed of 14 knots receive $1 a mile, while those of 1500 tons and a speed of 12 knots receive "two-thirds of a dollar a mile." This act was designed to maintain lines of ships which would be useful as scouts, transports, etc., in time of war.

Before stating the effect of this law upon American shipping, certain facts in connection with the subsidizing of ships by the continental nations of Europe will be useful. It is a curious fact that while the annual reports of our Commissioner of Navigation have for years given much space to the "progress" of the British, the German, and the Japanese shipping, nothing has been said about the "progress" of the shipping of France, of Italy, or Austria. The progress of the shipping of England, Germany, and Japan is stated because government aid is given to shipping in those countries and shipping makes progress; but in the other countries, where still more liberal aid is given to shipping, no progress worth mention is made. The annual report of the Commissioner of Navigation is made a vehicle for the dissemination of arguments in favor of the subsidy policy.

A candid examination of the policy of Germany shows that some aid has been given to lines of ships in the form of liberal pay for carrying mails. The North German Lloyd receives $1,330,420 per annum for its service to China, Japan, Australia, and the German possessions in the Pacific. The Germans thought it better policy to subsidize a line of merchantmen than to maintain a line of transports to its colonies as the United States has been doing in connection with the Philippines. The payment to the North German Lloyd is properly called a subsidy; to give the name of subsidy to all payments made to German steamers for carrying the mail is to misrepresent the facts in a way that injures the cause of the subsidy advocates materially in the eyes of all who know the facts.

The German railroads, which are owned by the government, not only give low rates on goods intended for export, but extremely low rates are provided for all materials used in building ships. The fact that special rates on railroads are used to promote the German merchant marine is worth serious consideration in the United States, even though such rates are here viewed with suspicion. The national laws governing our railroads, as enforced now (1910), are in some respects an incubus upon legitimate and praiseworthy enterprise. Through ignorance and prejudice the efforts of our transportation lines to increase our export trade have been seriously hampered.

Unquestionably subsidies and special rates were provided to extend German influence by means of shipping. The payment of bounties has been one feature of the expansion of German shipping. To assert that the bounty has been the sole, or even the chief, cause of that expansion, however, is to misstate the facts. The experience of France, for instance, shows conclusively that a subsidy in itself is not enough to create a merchant marine. Although the French subsidy is so liberal that French cargo carriers are able to sail half-way around the world in ballast to get a cargo at rates that would be less than cost of maintenance for any other ship, the French merchant marine grows so slowly as to justify the assertion, made by the late Captain John Codman, that the French mariners are working against a fiat of nature. The tonnage of 1881, 914,000, was but 1,952,000 in 1908.

Further than that the German subsidies have been less than those paid by the British (especially those paid to the Cunard Company), and yet German steamers are steadily encroaching upon those of the British. The reason for the progress of German shipping is readily found in the spirit and habits of the people. Consider the work of the patient, spectacled scientist in his laboratory—his methods and his aims; consider the growth of the factory system; consider the effect of the training which all men receive in the army or navy—how the whole people learn to move as one man, and as comrades, for the attainment of a worthy national object; consider how all the people—the men with the hoe as well as the men behind the guns—are stirred by an attack, or a seeming attack, upon the Fatherland.

The effect of government bounties upon German shipping is like that seen when the spectacled German professor of agriculture applies inorganic fertilizers to crops planted in well-cultivated, humus-filled soils. The effect in France, and other nations not well prepared for expansion, is like that when those fertilizers are applied to arid, acid, uncultivated land. In Germany the soil for the production of shipping was in excellent condition before the fertilizer was applied. What is the condition of that soil in the United States?

The American subsidy law has been in operation since 1891. For the service rendered it provides more liberal compensation than that given to any German ship. The American Line (now operated as a part of the fleet of the International Mercantile Marine Company), owns two American ships that were built for the line and two British ships that were placed under the American flag by special act of Congress. The subsidy maintains this line in existence but does not increase it. The Mallory line has been extended somewhat since the subsidy was given to it. Elsewhere ships that were maintained under the subsidy have been driven from their route by foreign competition. The ships run in connection with the Great Northern Railroad, for instance, were unable to compete with the Japanese line between the same ports, partly because the Japanese subsidy was more liberal, and partly because of the greater expense of running American ships. In short, the law of 1891 has failed to provide an American merchant marine.